If you can't remember off the top of your heads what those claims and counterclaim are about, take a look here, where you'll find a chart of SCO's Complaint and Novell's Answer. We see from this chart that the claims SCO is asking for summary judgment on are Slander of Title (First Cause of Action), Breach of the APA and TLA (Second Cause of Action), and Unfair Competition (Fifth Cause of Action), as well as Novell's First Counterclaim (Slander of Title).

In this filing, we come to understand why SCO deposed Maureen O'Gara, as Dan Lyons reported they had on his blog, and why Novell reportedly used 3 hours of the time, according to Lyons, asking her questions about the stalking incident regarding me.

SCO uses her as a witness to try to support the idea that Novell deliberately timed its announcement that Novell owned the UNIX copyrights to harm SCO, O'Gara's claim being that Chris Stone allegedly told her that. If true, which I doubt, it might explain his sudden exit from Novell. I find it hard to believe Stone would do that, and even if in some alternate universe he did, he surely wouldn't be so stupid as to tell a journalist about it. There are SEC rules, after all.
I notice he turned up in a Dan Lyons blogaroni moment the other day, saying things helpful to SCO. That's if you believe a word Lyons writes. Read on for why you just might not want to.

We figured out years ago that O'Gara was "the journalist" that SCO said had told them these things. Remember the fascinating correspondence between SCO and Novell at the time that came to light in 2004? But SCO of course pretends it has just "come to light" in discovery:

SCO has now brought to light evidence of Novell’s motives for suddenly claming ownership of the copyrights starting in late May 2003. Maureen O’Gara, a journalist covering the computer industry since 1972, recently testified that then Novell Vice Chairman Chris Stone conveyed to her, with “laughter,” that Novell was timing its ownership claims to coincide with SCO’s earnings report in order to “confound SCO’s stock position” and “upset the stock price.”

I've seen some call O'Gara pejoratively a "fiction writer". That's not a compliment for a journalist. No doubt we'll hear more about this when Novell responds, and I suggest reserving judgment on the matter. I always thought well of Stone, and this doesn't match anything I've ever seen or known about him, or Novell either. It's a serious accusation, and I wouldn't believe it, personally, on O'Gara's testimony or SCO's. SCO has a history of smearing people in court filings and then never being able to offer any real proof. Remember the failed spoliation claims? The mountain of code, the MIT deep divers, blah blah? So, I suggest we wait and see.

Let's get back to O'Gara and why you might want to take her testimony with a grain of salt. When she wrote her stalking piece, the entire staff of LinuxWorld quit in protest over what they called the ethical lapse:

We regret that Sys-Con Media has been unable to apply a standard of journalistic ethics that we can comfortably operate under. We feel that recent articles published with the consent of Sys-Con Media fail to meet minimum generally accepted journalistic codes, and because the management of Sys-Con Media has failed to acknowledge that the articles are by all informed judgment ethically unsupportable, we have decided we must find other avenues for our work.

The more informed among you may have known that the editors of the print edition of LinuxWorld Magazine have been having a bit of a running firefight with the management of Sys-Con (who publish the magazine and run a number of other magazines and web presences) in regard to Maureen O'Gara's "coverage" of the industry. Sys-Con pays Ms. O'Gara for her commentary, which to us has frequently resembled repackaged press releases and poorly researched attacks intended to incite rather than inform.

She also evidently has a dislike of Pamela Jones, who has maintained the Groklaw site and in general has done nothing worse than provide insightful discourse in regards to Open Source legal issues. O'Gara has taken every opportunity to cast disrepect on Jones, and has now outdone herself with a hatchet job in which she publishes personal information about Jones, including her religious affiliation (which she insults) and her home address and description of her living arrangements.

This is the worst kind of yellow journalism, a pure ad hominem attack intended to portray Jones as a senile religious kook not to be taken seriously. In fact, O'Gara's track record of biased and incomplete reporting shows that she is the kook, and I for one am no longer willing to affiliate myself with an organization that will pay for this type of character assasination. The editorial staff of LinuxWorld Magazine has been calling for Sys-Con to sever their affiliations with O'Gara for at least half a year, with mixed results. This is the final straw, and although I can not speak for the rest of the editorial board, I am not going to further sully my reputation by affiliation with a sleazy sensationalist such as O'Gara. I call on Sys-Con to immediate terminate all business dealings with Ms. O'Gara, or I will find another outlet for my work.

I do not bring forth this article to endorse it in any way, shape, or form. I condemn it. It is full of slander and malice. With the publication of phone numbers, addresses and (in the LinuxBusinessNews version of the story) photographs of homes and family members, it is clearly designed to intimidate Jones into silence.

Having discussed this online with Jones yesterday, I can tell you it's not going to work.

Many in the tech journalist community suspect that the information gathered for this article was being done by private investigators on behalf of SCO. SCO's own statements in their last public conference call indicate that they were more than willing to launch such an investigation. I do not know if O'Gara actually did the legwork her story claims, but I would be very interested if there were private investigators involved and if so, who paid for them....

This is nothing more than another chapter in a smear campaign that violates every shred of ethical journalism I can think of. Not only am I outraged on a personal level, but this bodes very ill on a professional level as well. If private entities or public corporations can single out "troublesome" journalists (or bloggers or even private citizens) and expose them to such scrutiny in an effort to intimidate them into silence, then we, as journalists and private citizens) all stand to lose a great deal in our pursuit of truth.

As you see, I am still here. But those are the right
questions. I hope, personally, that Novell asks both SCO and Dan Lyons those questions. By all means ask who paid for the private detective. Yes, there was one. Who got the phone records, and how? Get all the email too, and the paid bill. Does O'Gara have proof of payment? Somebody had to pay for that detective. And when you find the detective, ask him who he said he was working for. Ask Forbes to look for that bill, by all means. Ask Lyons for all his email back and forth to SCO and O'Gara. Is he working with SCO trying to find me? If so, why? Why otherwise would he post on his blog that he was looking for information from anyone on how to find me just before, as we now know, SCO claimed to be trying to serve a subpoena on me? Just a happy coincidence? That's what I'd ask if I were deposing him, anyway.

"I apologize to our readers, to the open source community, to our LinuxWorld editors, and to Ms. Pamela Jones for publishing the article."

Then there is the ethical and legal question about pretexting. How exactly would a journalist legally get someone else's phone records? I know of no legal way. Yet she reported who I allegedly had called. Who got that info and how? That is a serious question. While I don't know the answer, Novell undoubtedly is interested in showing the jury such ethical questions, because if a witness can be shown to be unethical in one area, the jury will take what the witness testifies with a grain of salt, and well they should.

If you were to assume that Lyons is also on the SCO team (you might find this account of a conversation between Dan Lyons and journalist James Turner of interest, where bias against me on the part of Lyons shines through), then you could also now understand the likely purpose of Lyons' effort to rehabilitate O'Gara in the article he wrote about how bloggers are from the devil and all that. Remember how we puzzled about why he defended her in that article? Could it be because SCO knew it needed her to be a credible witness in the case down the road? A credible witness. Now that, methinks, will be an uphill slog.

If the impression of O'Gara is of a SCO partisan, with an agenda, and some ethical wobblies to boot, it undermines her value as a witness. After all, I think we can agree that if someone were willing to pretext, the person might be willing to lie. Ditto with Lyons. When he attacked Groklaw, printing the usual innuendo and smears, in his blogs-are-from-the-devil article, it was widely condemned.
The Internet Press Guild wrote an Open Letter, which it also sent to Forbes, in protest. I didn't make it part of Groklaw's collection at the time, but here it is:

THE INTERNET PRESS GUILD
[address]

Steve Forbes
Forbes Magazine
[address, phone]

AN OPEN LETTER TO FORBES MAGAZINE

As members of the Internet Press Guild, an organization of approximately 80 writers and editors covering technology, founded in 1996, we view with some alarm the recent publication of a highly inaccurate article, "Attack of the Blogs" in your magazine.

We wish particularly to express concern over the sidebar article which lays out a road map for legal harassment and smear tactics to be used against bloggers who report critically on corporate activities. The dividing line between journalists and bloggers is a hazy one. We would think that Forbes would be the first to agree that the ability of journalists (online or print) to report on the behavior of companies without fear of reprisal is a cornerstone of the First Amendment.

There are perfectly adequate outlets for wronged parties to address negligent reporting, through libel law. This sidebar is a blueprint for corporations and private individuals to intimidate reporters and damage the investigative press that the American public depends on. While there may very well be a good story on blogging and how corporations should respond to negative blogging, this was not it.

In addition, in the article several statements are made in regards to Pamela Jones, a paralegal, journalist, and member of the IPG; her Web site Groklaw, a technology and legal news blog; and the actions of a journalist named Maureen O’Gara.

Some facts, which were publicly available, were omitted in the story or given a different connotation that misleads the readers. For example,

1) "Bloggers all but got O'Gara fired." In point of fact, the parties lobbying most heavily for the termination of her contract were not bloggers, but the editors of Sys-Con's own LinuxWorld Magazine. And the statement is doubly inaccurate, because bloggers couldn’t have gotten O'Gara "fired," since she was not an employee of Sys-Con Media. She was a freelancer, and a blogger herself.

2) The story also omits such aspects of O'Gara's reporting, which caused the editors to ask for her contract's termination.

These included such stalking behavior as describing the interior of Jones’ alleged apartment, publishing photographs of the exterior of her and her mother's alleged dwellings, casting aspersions on Jones' religious beliefs and referring to Ms. Jones in inflammatory terms such as 'a harridan'. Is it any wonder that the Sys-Con editors were concerned with being associated with this type of yellow journalism?

3) In addition, O'Gara, who is praised in this article, has a track record of poor reporting which had caused other Sys-Con editors to long complain about the caliber of O’Gara’s work. In fact, in the fall of 2004, the editors of LinuxWorld Magazine had taken the unusual step of publically distancing themselves from O'Gara in an open letter to the readership of the magazine.

4) The article also alleges that hackers took down the site, and cites a heavily inflated damage figure provided by the owner of Sys-Con Media as fact.

In reality, no hard evidence has ever been presented for an organized
attack on the Sys-Con web sites. A much more plausible explanation is available: that the sites went down under the load of people seeking out the original article.

The story further implies that Jones either organized or condoned a denial of service attack. There is not a shred of evidence for these charges.

5) The story also implies that Pamela Jones thanked a group of hackers for forcing O'Gara out, In fact, in the example cited, she was thanking the LinuxWorld Magazine editors
for standing up to O'Gara and showing appropriate journalistic ethics.

6) The story also fails to mention that in the opinion of the Society of Professional Journalists ethics committee, O'Gara had been guilty of numerous ethical breaches in her reporting.

According to Fred Brown, co-chair of the SPJ Ethics Committee, "That piece by O'Gara definitely is outside the norms of good journalism. It's bullying, insulting and harassing, and I, for one, really don't get the point of it.”

Far from O'Gara being an "intrepid reporter," her willful invasion of privacy and persecutorial reporting style deserved condemnation rather than praise....

7) The article also inaccurately states that O'Gara got Ms. Jones' phone number from the court in Nevada. According to Ms. O'Gara's own writing, she got it from a journalist:

"See, even though Groklaw treats cell phones like they were Kleenex and changes its unpublished numbers regularly, one number it left with a journalist led to this flat and - wouldn't you know it but - some calls from there had been placed to the courts in Utah and to the Canopy Group so obviously this just isn't any Pamela Jones."

Therefore, we are very concerned with this extremely one-sided and misleading portrayal of events. This is not the level of journalism we have grown to expect from Forbes.

We hope Forbes Magazine will take actions to improve editorial oversight of its product to prevent such poor articles from appearing in the future. Articles such as this one can only harm the image of Forbes in particular and the entire journalistic community in general, and are certainly not representative of the high standards we all strive for in our work.

At the time, Fuat in an interview said plainly that he didn't believe at all that Groklaw was involved in any DOS attack, and of course he would be right. You can read the press release here about the IPG letter to Forbes.

So, Lyons and O'Gara both seem to stand before the court with an ethical cloud over their heads. And recently Lyons shows up again, in a SCO exhibit, again helpful to SCO's litigation agenda, writing more baloney about me, but how valuable will that be under these circumstances? I've wondered if Forbes wouldn't print the latest Lyons hate-PJ material now showing up on his blog, and that is why he was forced to join the blogosphere, ironically enough, but I wouldn't wish to place the Forbes bar too high. I might get disappointed. But if they did refuse, I commend them for mitigating their damages. It was Lyons, after all, who first insinuated a Groklaw-IBM tie. And it was he who first mentioned the court filing with a different date stamp. He seems deeply, deeply involved, no matter how you look at it, from my perspective.

He wrote on his blog the other day something to the effect that I will perhaps eventually confess I got that early filing from IBM lawyers. I can categorically state that I never received any IBM court filings from IBM lawyers, early or otherwise. The fact that he wrote that makes me wonder if he's gotten court filings from SCO lawyers. If I could depose him, I'd ask. What else does he get from SCO? IBM in the very early days of the case, like when it first filed an Answer, sent the filing to journalists, but I can only think of a couple of times that happened, but when they did it was via their PR department. How could he not know that? I still don't know on that precise court filing where it came from, but I surely know where it *didn't* come from.

The question at trial, if there ever is one, and even in the summary judgment motion, will be what kind of people are these, all helping SCO move its program forward in the media and in declarations and depositions and exhibits? Are they believable? What is their connection, if any, to SCO, and specifically do any of them stand to benefit from any future money pot? Is it all organized by SCO? And since in slander of title cases the issue is excessive publication, did SCO use them to say in public things SCO wanted to say but felt it couldn't say directly? In short, did SCO do with Lyons and O'Gara what it falsely claims IBM did with me?

And if it were me, I'd want to know if there is any Microsoft shadow in the background. Someone placed a threatening comment on Groklaw the other day, saying someday the "darkness" behind PJ would be revealed, and to "sleep well", and because of the threatening tone, I checked the logs and the comment appears to have come from an ad agency that does a lot of work for Microsoft. So I am wondering about things I didn't think about before. I remember what happened to an innocent man's reputation in the Massachusetts ODF affair.

So SCO's problem with O'Gara will be that her credibility is in question. Lyons too. Some on the jury, as well as the judges, might have questions about her testimony. I know I do. I didn't write about all these details at the time, because to me it's all icky and smarmy, and because others were speaking out, which I was and am indeed grateful for -- it's a terrible feeling to be smeared in the press, let me tell you, and I've had to endure it now for at least three years nonstop -- but now that SCO has brought it all into the litigation, I am writing about it, because Groklaw tries to cover the entire SCO litigation, and it's part of the case now.

Novell is likely planning to raise those credibility issues. And of course, O'Gara continues to write nothing but pro-SCO, antiGroklaw pieces, from what folks have told me. She can't say I never said anything nice about her, by the way. I did, right after an earlier attack on me, actually. No. I wouldn't write the same words after the stalking incident, but I do still believe in treating everyone with a measure of dignity, even if I don't approve of their conduct.

Her latest is a piece gloating, nay drooling, over what she says is the SCO plan regarding its latest motion regarding the subpoena, to have the court force me out of "anonymity" under threat of jail time, on the theory that a shout-out over the internet must be good enough service. That is, of course, legal silly putty. The lawyers must have just thrown that out to see if it would bounce, and if so, how high, for a laugh. Or to scare me. It might have scared me, I suppose, if I didn't know anything about the law and subpoenas and the First Amendment and how the Supreme Court views anonymous speech anyway. And I'm not anonymous. SCO attached as an exhibit a press release about me joining OSRM, with my name and my then-business affiliation for the world to see. This is, really, just more intimidation, I think, part of a long campaign. They just want to know where I am so they can harass me further, I believe, if not worse. I've always suspected that O'Gara publishing exact addresses with pictures of the mailbox, even, showing the number was so if something bad happened to me, SCO could claim they had nothing to do with it, that it was just some net kook. And indeed, any net kook would have known where X marked the spot, if accurately reported. But as I've said long ago, if anything bad happens to me, I think you'd all know a couple of places the police could fruitfully begin an investigation, even if it were apparently an "unfortunate accident".

Anyway, SCO goes on and on about the testimony of various pals, like Darl's good friend Ty Mattingly (at one time, at least, a SCO shareholder), and others, including a member of the SCO board of directors, who all swear on the Bible that they really thought that the copyrights transferred, that it was their intent they do so. Not that they'd mind if SCO were to win or anything, even though they might personally benefit financially and all. But none of them shows the court any document to prove it beyond what SCO already showed Judge Kimball way back when, which he already indicated wasn't enough.

I think it is actually possible that at least some of these folks are being sincere, that they indeed thought the copyrights were transferring. But thinking it isn't enough. And the lawyers had to know, I think, that there needed to be a writing, because that is what copyright law requires. If they just didn't think of it, that is unfortunate for SCO, but copyright law is what it is. There is no, "But I thought..." You must have a writing, and the lawyers had to know that and should have addressed it if they really did intend for the copyrights to transfer. From all we've seen, they didn't address it if that really was their intent. Maybe SCO should sue their lawyers and leave the rest of the world alone.

The truth is that sometimes people goof. Yes. Even lawyers. But you knew that now, from watching the subpoena farces. Certainly if Novell really had intended to transfer the copyrights and SCO intended to receive them, the lawyers kind of botched the job or we wouldn't be reading the arguments about it now. Someone would be standing before Judge Kimball with a copyright transfer agreement or an agreement specifically listing the copyrights or at least mentioning that all the copyrights were included. That isn't something you leave unspecified, in my experience. And you can easily see why, looking at this mess.

What SCO argues over and over is that the APA *must* have meant everything transferred:

The APA provides for the transfer to Santa Cruz of “all right, title, and interest” in the UNIX and UnixWare source code and products and “All rights and ownership of UNIX and UnixWare.” Such language plainly includes the UNIX and UnixWare copyrights. The APA Bill of Sale, in which Novell stated that it “does hereby transfer, convey, sell, assign and deliver” to Santa Cruz “all of the Assets,” effectuated the transfer in words that exceed the requirements of the Copyright Act. Novell relies on language in the excluded assets schedule of the APA, but Amendment No. 2 to the APA expressly replaced that language to clarify that the UNIX and UnixWare copyrights were not among the excluded assets. The provision on which Novell relies simply does not exist for purposes of construing the APA.

Here's why I think this argument fails, or one reason why it does. We know for a fact that most of the trademarks did not transfer, so arguments that "everything" transferred lock stock and barrel simply are not true. To argue that the language must have meant copyrights too, because everything was supposed to transfer bumps into the trademark wall, over and over, and SCO never addresses that or even mentions it.

That's the only new argument I see, SCO's assertion that Amendment 2 obliterates and replaces the APA's list of Excluded Assets. Here's part of what they say:

In fact, Section A replaces the original Item V.A, clarifying that the Excluded Assets do not include those copyrights, which were transferred with “all the Assets” under the APA and Bill of Sale.

Amendment No. 2 clarified that the copyrights at issue were not Excluded Assets. Section A states that the Excluded Assets do not include the copyrights “required for SCO to exercise its rights with respect to the acquisition of UNIX and UnixWare technologies.” (Id.) Plainly the UNIX and UnixWare copyrights are so required.

I know. It makes no sense to me either. If they were required, then how come SCO had to ask Novell for them in 2003, or Novell says they did? How come no copyrights were registered back then, and SCO only did it in 2003? For that matter, look at the copyrights in the software, and tell me if you continue to see Novell copyrights after the date of APA. How could that happen, if SCO's story were true?

Also, I don't see anyone addressing the 1995 board meeting, wherein the board voted not to transfer the copyrights:

Novell will retain all of its patents, copyrights and trademarks (except for the trademarks UNIX and UnixWare), a royalty-free, perpetual, worldwide license back to UNIX and UnixWare for internal use and resale in bundled products, Tuxedo and other miscellaneous, unrelated technology.

Yet SCO claims the entire business transferred. Well, not the patents, for sure, and not some trademarks. X/Open got the UNIX trademark and eventually UnixWare too, so even the board notes are not 100% accurate, I don't think. We know that because SCO tried hard to get but failed to get the trademark on Unix System Laboratories, despite telling the USPTO that it bought the business and got all the assets (for the complete trademark story, go here, here, here and here. That was a story Groklaw broke, by the way, in case anyone wonders if this is journalism here or we're just whistling Dixie.). And Magistrate Judge Brooke Wells has already ruled in the SCO v. IBM case that not all the assets transferred:

THE COURT: Thank you. I'm prepared to rule on this matter at this time. First, I find that the Novell to Santa Cruz transaction did not transfer the entirety of the business, nor did the Santa Cruz to Caldera transaction.

And the thing is, Ty Mattingly was at that board meeting, and so were some others that show up here:

A meeting of the Novell, Inc. Board of Directors was held on Monday, September 18, 1995 commencing at noon Mountain Time. The meeting was held pursuant to a telephone conference call. Seven of the eight Directors were present for the meeting namely: Bob Frankenberg, Jack Messman, Elaine Bond, Larry Sonsini, Alan Ashton, Ian Wilson and John Young. Also present by invitation were David Bradford, Ty Mattingly, and Jeff Turner of Novell.

Yet not a word about all this in SCO's summary judgment motion, which of course is one way to lose. We'll no doubt see Novell raise this, unless somehow in depositions there is an answer that isn't apparent to us on the outside. But it's a huge question of fact, which is what you need to defeat a motion for summary judgment.

SCO quotes from Nimmer on Copyrights:

“As with all matters of contract law, the essence of the inquiry here is to effectuate the intent of the parties. Accordingly, even though a written instrument may lack the terms ‘transfer’ and ‘copyright,’ it still may suffice to evidence their mutual intent to transfer the copyright interest.”

SCO's problem is that it apparently was not mutual, or at least it isn't now, and there's no solid proof that it ever was mutual, not on paper. It also quotes cases that stand for the proposition that you don't have to say the word copyright, "all assets" to a business would suffice. But *all* assets didn't transfer. The trademark didn't, for example, not even with Amendment 2, so even if we say that the case applies after Amendment 2 replaced the Excluded Assets list, SCO's theory, the trademark is still excluded. And SCO owes Novell for certain license monies it collects for Novell. For that reason, I think the argument fails.

Another case says that "a one-line pro forma statement will do." And that is true. But where is that one line? SCO again uses the bill of sale, that lists "all of the Assets". All rights and ownership, SCO says, is what transferred, but we know that the trademark didn't, so you can't really say "all", and so the cases don't seem to really help. Plus Judge Kimball saw that document already. And the fact that SCO doesn't mention the trademark or the board meeting tells me that they know they are on shaky ground.

To me, it all reads more like what lawyers write up and file to make a client happy, even though they kind of have to know it can't possibly work out unless someone isn't paying attention. That can happen, so I guess this is in the it-doesn't-hurt-to-try department.
I feel very bad for Chris Stone, though. So many people have been smeared in the press by this litigation. Where does he go to get his reputation back?

SCO'S MOTION FOR PARTIAL
SUMMARY JUDGMENT ON ITS FIRST,
SECOND, AND FIFTH CAUSES OF
ACTION AND FOR SUMMARY
JUDGMENT ON NOVELL'S FIRST
COUNTERCLAIM

Civil No.: 2:04CV00139

Judge Dale A. Kimball
Magistrate Brooke C. Wells

1

Plaintiff/Counterclaim-Defendant, the SCO Group, Inc. ("SCO"), pursuant to Rule 56 of
the Federal Rules of Civil Procedure and for the reasons set forth in the Memorandum in Support
of SCO's Motion, respectfully moves this Court to enter partial summary judgment for SCO on
its First, Second and Fifth Causes of Action and to enter summary judgment for SCO on
Novell's First Counterclaim.

Plaintiff/Counterclaim-Defendant, The SCO Group, Inc. ("SCO"),
respectfully submits this Memorandum in Support of Its Motion for
Partial Summary Judgment on Its First, Second, and Fifth Causes of
Action and for Summary Judgment on Novell's First Counterclaim.

PRELIMINARY STATEMENT

In a public statement issued on May 28, 2003, and for the first
time since 1995, Novell claimed to own the copyrights at issue in
this case. Novell announced that it had retained ownership of the
UNIX and UnixWare copyrights under the Asset Purchase Agreement
("APA") whereby it sold the UNIX and UnixWare business to SCO's
predecessor-in-interest, The Santa Cruz Operation, Inc. ("Santa
Cruz"). SCO's claims for slander of title (Count I), breach of
contract (Count II), and unfair competition (Count V), as well as
Novell's counterclaim for slander of title (Count I), are each
based in part on the allegation that the opposing party has laid
false claim to those copyrights. SCO submits that the Court should
grant partial summary judgment on those claims and summary judgment
on Novell's slander-of-title counterclaim, because the APA as
amended plainly transferred the copyrights to Santa Cruz.

The APA provides for the transfer to Santa Cruz of "all right,
title, and interest" in the UNIX and UnixWare source code and
products and "All rights and ownership of UNIX and UnixWare." Such
language plainly includes the UNIX and UnixWare copyrights. The APA
Bill of Sale, in which Novell stated that it "does hereby transfer,
convey, sell, assign and deliver" to Santa Cruz "all of the
Assets," effectuated the transfer in words that exceed the
requirements of the Copyright Act. Novell relies on language in the
excluded assets schedule of the APA, but Amendment No. 2 to the APA
expressly replaced that language to clarify that the UNIX
and

6

UnixWare copyrights were not among the excluded assets.
The provision on which Novell relies simply does not exist for
purposes of construing the APA.

In addition, overwhelming extrinsic evidence confirms the intent
to transfer the copyrights under the APA. Such evidence includes
the deposition testimony of the central witnesses on both sides of
the transaction, including Robert Frankenberg, Novell's CEO at the
time of the APA, who recently testified in this matter:

Q. Was your initial intent in the transaction that
Novell would transfer copyrights to UNIX and UnixWare technology to
Santa Cruz?

A. Yes.

Q. Was that your intent at the time when the APA was signed?

A. Yes.

Q. Was it your intent when that transaction closed?

A. Yes.

Q. And did that remain your intent, as you view it, at all relevant
times?

A. Yes.

Q. So that never changed?

A. No.

In all, the intent to transfer the copyrights reflected in the
unambiguous language of the APA is confirmed by the deposition
testimony of no fewer than nine witnesses, including the CEOs,
responsible executives, and chief negotiators for Novell and Santa
Cruz, as well as the parties' conduct in the years that followed
the APA.

SCO has now brought to light evidence of Novell's motives for
suddenly claming ownership of the copyrights starting in late May
2003. Maureen O'Gara, a journalist covering the computer industry
since 1972, recently testified that then Novell Vice Chairman Chris
Stone

7

conveyed to her, with "laughter," that Novell was timing its
ownership claims to coincide with SCO's earnings report in order to
"confound SCO's stock position" and "upset the stock price." On
June 6, 2003, after SCO had found and sent to Novell a copy of
Amendment No. 2, Novell candidly recanted its ownership claims,
stating in pertinent part in a press release:

Amendment #2 to the 1995 SCO-Novell Asset Purchase
Agreement was sent to Novell last night by SCO. To Novell's
knowledge, this amendment is not present in Novell's files. The
amendment appears to support SCO's claim that ownership of certain
copyrights for UNIX did transfer to SCO in 1996.

Novell has now admitted that it made its announcement of copyright
ownership on May 28, 2003, without consulting the witnesses cited
herein, none of whom were even at Novell at that time. Novell has
also admitted that it made those claims even though it then
possessed Amendment No. 2. Such evidence leaves little doubt about
Novell's motivations for making its ownership claims.

In light of the transfer of the UNIX and UnixWare copyrights
under the plain language of the APA and Bill of Sale, SCO is
entitled to partial summary judgment on its First, Second, and
Fifth Causes of Action and summary judgment on Novell's First
Counterclaim.

1. Novell and Santa Cruz intended for the APA to transfer all of
the UNIX and UnixWare business to Santa Cruz. (Ex. 1, Recital B,
§ 1.3(a)(i).) Section 1.3(a)(i) of the APA states:

8

It is the intent of parties hereto that all of the
Business and all of Seller's backlog, if any, relating to the
Business be transferred to Buyer.

(Ex. 1 § 1.3(a)(i) (emphasis added).)

2. The first provision of the APA, Recital A as amended, defines
the "Business" that the parties intended to transfer:

Seller is engaged in the business of developing a line
of software products currently known as UNIX and UnixWare, the sale
of binary and source code licenses to various versions of UNIX and
UnixWare, the support of such products and the sale of other
products ("Auxiliary Products") which are directly related to Unix
and UnixWare (collectively, the "Business").

(Id. at 1; Ex. 2 ¶ A.)

3. Section 1.1(a) of the APA defines the assets transferred to
Santa Cruz as those identified in Schedule 1.1(a) of the APA:

On the terms and subject to the conditions set forth in
this Agreement, Seller will sell, convey, transfer, assign and
deliver to Buyer and Buyer will purchase and acquire from Seller on
the Closing Date (as defined in Section 1.7) all of Seller's
right, title, and interest in and to the assets and properties of
Seller relating to the Business (collectively the "Assets")
identified on Schedule 1.1(a) hereto. Notwithstanding the
foregoing, the Assets to be so purchased shall not include those
assets (the "Excluded Assets") set forth on Schedule
1.1(b):

I. All rights and ownership of UNIX and UnixWare,
including but not limited to all versions of UNIX and UnixWare
and all copies of UNIX and UnixWare (including revisions and
updates in process),

9

and all appropriate technical, design, development,
installation, operations and maintenance information concerning
UNIX and UnixWare, including source code, source
documentation, source listings and annotations, engineering
notebooks, test data and test results, as well as all reference
manuals and support materials normally distributed by Seller to
end-users and potential end-users in connection with the
distribution of UNIX and UnixWare, such assets to include
without limitation: Source Code Products . . . Binary
Product Releases . . . and Products Under Development.

II. All of Seller's claims arising after the Closing Date against
any parties relating to any right, property or asset included in
the Business.

III. All of Seller's rights pertaining to UNIX and UnixWare under
any [assignable] software development contracts, licenses and any
other contracts to which Seller is a party or by which it is bound
and which pertains to the . . . :

VI. All copies of UNIX and UnixWare, wherever located, owned by
Seller.

5. Through the APA Bill of Sale, executed on the Closing Date,
Novell in fact transferred to Santa Cruz all of the Assets:

In accordance with Article 1.1(a) of the Agreement,
Seller, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, does hereby
transfer, convey, sell, assign and deliver to Buyer, without
recourse, representation or warranty except as otherwise expressly
provided in the Agreement, all of the Assets.

(Ex. 3 (emphasis added).)

6. Section 1.6 of the APA provided that, as part of the
transaction, Santa Cruz would license back to Novell the UNIX and
UnixWare technology transferred under the APA (the

8. Amendment No. 2 to the APA, however, revised Schedule 1.1(b)
so that Item V.A. now reads:

All copyrights and trademarks, except for the
copyrights and trademarks owned by Novell as of the date of the
Agreement required for SCO to exercise its rights with respect to
the acquisition of UNIX and UnixWare technologies. However, in
no event shall Novell be liable to SCO for any claim brought by any
third party pertaining to said copyrights and
trademarks.

(Ex. 5 § A (emphasis added).)

II. OVERWHELMING EXTRINSIC EVIDENCE CONFIRMS THE TRANSFER OF
THE UNIX AND UNIXWARE COPYRIGHTS TO SANTA CRUZ UNDER THE
APA.

A. Testimonial Evidence.

9. The APA provided for the public disclosure of the transaction
through a "joint press release with respect to the subject matter
of this Agreement." (Ex. 1 § 4.7.) Novell and Santa Cruz
issued that press release on September 20, 1995. (Ex. 6 at 222; Ex.
7 at 22-23.) It states in pertinent part:

According to the terms of the agreement, SCO will
acquire Novell's UnixWare business and UNIX intellectual
property.

11

(Ex. 8 at 2 (emphasis added).)

10. Robert Frankenberg was the President and CEO of Novell at
the time of the APA. (Ex. 7 at 7.) On February 10, 2007, Mr.
Frankenberg testified:

Q. Was your initial intent in the transaction that
Novell would transfer copyrights to UNIX and UnixWare technology to
Santa Cruz?

A. Yes.

Q. Was that your intent at the time when the APA was signed?

A. Yes.

Q. Was it your intent when that transaction closed?

A. Yes.

Q. And did that remain your intent, as you view it, at all relevant
times?

A. Yes.

Q. So that never changed?

A. No.

(Id. at 135.) Mr. Frankenberg never contradicted that
testimony.

11. Indeed, Mr. Frankenberg understood that the APA's sale of
all rights and ownership included the copyrights:

Q. Is it your understanding that that sale of all
rights and ownership of UNIX and UnixWare would include copyrights
associated with UNIX and UnixWare?

MR. JACOBS: Objection, calls for a legal conclusion.

A. I guess I have to answer the question?

(By Mr. Singer) Yes, you should if you understand the question.

A. Okay. I understand. Yes.

Q. Now, did you ever give any directions to the team that was
negotiating the deal, including Mr. Thompson, Mr. Chatlos, that
they should transfer all right and title and interest to UNIX
and

12

UnixWare but retain copyrights for UNIX and UnixWare
from being sold?

A. No.

Q. Did you ever tell anyone at Santa Cruz Operation that copyrights
for UNIX and UnixWare were not part of the technology being
sold?

A. No.

Q. Did you ever authorize anyone at Novell to tell anyone at Santa
Cruz that copyrights were not being sold as part of the
transaction?

A. No.

(Id. at 19.)

12. Ty Mattingly was the Vice President for Strategic Relations
at Novell at the time of the APA. (Ex. 9 at 10-11.) He also
participated in the APA negotiations as Mr. Frankenberg's personal
liaison with the Novell negotiating team. (Id.) Mr. Mattingly
testified:

Q. Do you know whether in this case Novell is asserting
that the copyrights were not transferred?

A. Well, I mean, I have read enough about the case early on. I
haven't stayed real current lately. But I mean, obviously we're
here today because Novell is asserting that the copyrights were not
sold with the Unix business to SCO, and obviously SCO would assert
that they purchased the Unix business from us lock, stock and
barrel.

Q. And do you have a view as to the merits of Novell's assertion,
such as you understand it?

A. I do.

Q. And what is your view?

A. Well, my firm belief is that we sold the Unix business to SCO,
and that is why SCO paid us roughly 125 million dollars at that
point because they bought the Unix business from us basically in
its entirety. The only things that did not go with that was a kind
of an agent relationship whereby SCO was collecting the SVRX
royalties from existing OEMs at the time we sold that business and
then giving the bulk of those moneys back to Novell.

* * *

13

Q. Would it be fair to say that the transfer of the
Unix copyrights to SCO was consistent with your view of this
overall strategy?

MR. BRAKEBILL: Objection, mischaracterizes testimony.

A. So I can still answer? Yeah. I mean, absolutely. I believe that
when they bought the business, when they paid us 125 million
dollars, that the negotiations that we were involved with there was
about selling them the entire business, the software, which would
have included the copyrights.

(Id. at 29-32 (emphasis added).)

13. Duff Thompson was the Novell executive responsible under Mr.
Frankenberg's direction for the sale of the UNIX and UnixWare
business. (Ex. 10 ¶ 4.) After the transaction closed, Novell
appointed Mr. Thompson to serve as its representative on the Santa
Cruz Board of Directors. (Ex. 11 at 6.) Mr. Thompson testified:

Q. And a bundle of rights you believed included --
looking back on it, you believed the structure of the deal meant
that the bundle of rights included the copyrights?

A. No. At the time I believe it included the bundle of the
copyrights, at the time.

Q. Well, I'm a little confused because I thought you said this
morning that you don't recall any specific discussion about
copyrights.

A. Yeah, but that doesn't mean that that's not what I understood we
were doing at the time.

Q. So you —

A. So the fact that I may not have had a specific discussion that I
can recall 11 and a half years later should not be taken to mean I
don't recall what our intention was in selling the business. It is
impossible for me to parse in my mind the assignment that we
received to sell the -- to sell the entire business, all of Unix
and UnixWare to SCO, and to somehow also in that same breath say,
except the copyrights.

I just -- I don't understand that kind of thinking, and certainly I
just have to tell you that that kind of trick play was not
something that Bob Frankenberg would have directed, nor is it
something he

14

would have stood for. It's not something I would have
done. If we had intended not to transfer the copyrights, we would
have been very careful to say, you don't get the copyrights. And it
wouldn't have been an oblique reference. It would have been, you
get all the business except the copyrights. Not, you get all the
business.

(Id. at 132-133 (emphasis added).)

14. Ed Chatlos was the Novell Senior Director for UNIX Strategic
Partnerships and Business Development at the time of the APA. (Ex.
12 ¶ 4.) He was also Novell's chief negotiator of the APA.
(Id. ¶ 6.) Mr. Chatlos explains:

It was always my understanding and intent, on behalf
of Novell, that the UNIX source code and its copyrights were part
of the assets SCO purchased. I do not recall anyone else ever
suggesting that Novell would retain any copyright relating to UNIX,
nor was I present for any discussion, general or specific, during
the negotiations that contradicted my understanding of the
transaction described herein. None of my superiors at Novell ever
informed me that Novell was not transferring the UNIX copyrights to
SCO. Likewise, I never communicated to SCO in any way that the UNIX
copyrights were not being sold to SCO. Nor am I aware of any
instance in which anyone from Novell ever informed SCO in any way
that the UNIX copyrights were not being sold to SCO as part of the
transaction.

Given my central role in the negotiations, I believe I would have
known if the parties had agreed that Novell would retain UNIX
copyrights. My intent and understanding as the lead negotiator
for Novell was that Novell was transferring the copyrights to SCO
in the APA. At the time the transaction was signed and closed,
I did not observe anyone at Novell or SCO stating or acting as if
Novell had retained any UNIX copyrights. If they had, it would have
been contrary to the intent and structure of the deal as I
understood it and communicated with SCO. In fact, from the time
the APA transaction closed in 1995 until this day, it has been my
understanding and belief that Novell sold the UNIX copyrights to
SCO as of the time of the closing in 1995.

(Id. ¶¶ 9-10 (emphasis added).) In his recent
deposition in this case, Mr. Chatlos confirmed his views regarding
the transfer of the copyrights. (Ex. 13 at 37-39.)

15

15. As he testified at his deposition in this matter, Burt
Levine was an attorney at Novell at the time of the APA. (Ex. 14 at
15-23.) Mr. Levine reviewed and revised drafts of the APA.
(Id. at 163-64.) After the Business was transitioned to
Santa Cruz in February 1996, Mr. Levine worked as an attorney for
Santa Cruz. (Id. at 22-23.) Mr. Levine testified that under
the APA the "intention was to convey all of these ownership and
auxiliary ownership rights to the asset including copyright."
(Id. at 68.) He further testified:

Q. Mr. Levine, from the time of the APA in 1995 until
you left Santa Cruz in 2000, did you ever hear anyone whether
inside or outside of Santa Cruz or inside or outside of Novell say
that Novell had retained the UNIX or UnixWare copyrights?

A. No.

Q. If you had heard anyone make such a statement, would that have
been a surprise to you?

A. Very much so, yeah.

Q. And why do you say "very much so"?

A. My personal experience with the couple of years that I spent at
Novell was that it was a very ethical company and I, I was very
impressed with that.

Q. And how does that fact bear on your answer, the fact that you
had the view that Novell was an ethical company?

A. Was ethical and I believe that being an ethical company in its
dealings with its partners or transferees or whatever it is that
they would not resort to withholding information or trying to
withhold something that the transferee in this case would be
entitled to.

(Id. at 154-55 (emphasis added).)

Q. In looking at the first paragraph Roman I of
Schedule 1.1(a) of the Asset Schedule, and that language says,
quote, All rights and ownership of UNIX and UnixWare, including,
but not limited to all versions of UNIX and UnixWare, and all
copies of UNIX and UnixWare, including revisions and updates and
progress, dot, dot, dot, including source code, dot, dot, dot, such
assets to include without limitation the following, and then
there's a list of source

16

code products, binary product releases, products under
development and other technology, do you see that language?

A. I do.

Q. How does that language bear on your understanding at the time of
the APA and today that the UNIX copyrights and UnixWare copyrights
were among the assets transferred under the APA?

A. Do you mean the fact that these are listed specifically as
categories?

Q. I mean to ask you about the scope of Roman I.

A. Oh, the scope of Roman I with or without this listing, all
rights and ownership of UNIX and UnixWare, that gives all the
components of the business, including physical components and
intellectual components, to my mind will carry with it the
transfer of any copyrights that apply to them.

(Id. at 156-58 (emphasis added).) 16. Bill Broderick was a
contract manager in the UNIX licensing group at Novell and Santa
Cruz. (Ex. 15 ¶¶ 6-7.) He was also a member of the Novell
APA Transition Team. (Id. ¶ 10.) Mr. Broderick states:

My understanding of the sale of the UNIX assets from
Novell to Santa Cruz was that the UNIX copyrights were
transferred. To the best of my knowledge, from the time of the
closing of the APA in 1995 until after SCO asserted legal claims
concerning its Linux- related rights in 2003, Novell never
contested SCO's ownership of the UNIX copyrights.

(Id. ¶ 7 (emphasis added).)

17. In his recent deposition, Mr. Broderick testified that his
understanding is based on (among other things) Novell's explanation
of the transaction during "company-wide meetings" as well as
discussion in "contracts transition team," including discussion
about "changing the copyright notices in the source code to Santa
Cruz Operation, Inc." (Ex. 16 at 48-51.)

17

18. Alok Mohan was CEO of Santa Cruz at the time of the APA.
(Ex. 6 at 8.) Mr. Mohan has testified in this case:

THE WITNESS:

A. My belief is that we bought the business, except for the revenue
stream. And when we bought the business everything came with
it.

BY MR. BRAKEBILL:

Q. You believe that Santa Cruz got the Unix copyrights to through
the APA; is that right?

A. I believe —

MR. NORMAND: Objection to form.

THE WITNESS:

A. I believe I bought the whole business. That includes all
kinds of stuff. And -- and, you know, that's the answer, I think we
bought -- we got the whole thing.

BY MR. BRAKEBILL:

Q. Okay. But you haven't -- you haven't confirmed -- is -- is part
of the —

A. Yes, they are —

Q. Is Unix copyrights part of the Unix business?

A. Absolutely.

Q. Okay. So you believe that Santa Cruz got the Unix
copyrights?

A. Santa —

MR. NORMAND: Objection to form.

THE WITNESS:

A. Santa Cruz got the whole business. Includes lots of things.
Copyrights are part of it.

* * * *

Q. What is the basis of your opinion that Santa Cruz got the
business?

MR. NORMAND: Objection to form.

THE WITNESS:

18

A. That -- that's --that was the whole discussion
and intent, negotiations. That's my recollection of what we were
doing.

(Id. at 138-40 (emphasis added).)

19. Doug Michels founded Santa Cruz and was its Senior Vice
President at the time of the APA. (Ex. 17 ¶¶ 2-3.) He
states:

In connection with the 1995 purchase from Novell, the
parties agreed that (as is accurately explained by both Mr. Wilt
and Ms. Madsen) Novell could retain the existing binary royalty
stream even though the entire UNIX business, source code and
related assets, including copyrights, were transferred to Santa
Cruz.

(Id. ¶ 9 (emphasis added).) In his recent deposition,
Mr. Michels repeatedly confirmed that the parties to the APA
intended for Novell to transfer and for Santa Cruz to acquire the
UNIX and UnixWare copyrights:

Q. To the extent that you did, what did you mean by
that?

A. Well, I meant that the only way that I know of, and anyone on
my team knew of to buy a software business is to buy the
copyrights, and there's no way we would have ever done a deal to
buy a software business where we didn't get the copyrights and
all the other intellectual property. That's what you're buying. And
especially in the case of UNIX, with its convoluted intellectual
property history, and whatnot, to not get that stuff would be to
not do the deal. And so it was implicit in everything we did,
everything we thought. Every single person on my team understood
that. The lawyers understood. The business development people
understood it. The people at Novell understood it. I mean, it
— it's just so essential. It's -- you know, it's like
breathing oxygen, you know, I mean, you just — there's no
way that deal could have happened without getting the
copyrights.

* * * *

A. I know that everybody involved in this negotiation knew the
copyrights were being transferred. I know that.

19

Q. How do you know that?

A. Because I was there and I know it. That's -- I -- I know what --
I know there were discussions. I know there was shared
vision. I know we all understood what it meant to buy a
software company. You know, I've known these people for many years.
It -- it just wasn't ambiguous. It wasn't something that was
ambiguous.

(Ex. 18 at 134-38 (emphasis added).)

20. Jim Wilt was the lead negotiator for Santa Cruz. (Ex. 19
¶ 7.) Mr. Wilt testified with respect to his declaration
executed on November 23, 2004:

Q. You say in paragraph 8, quote, "It was my
understanding and intent during those negotiations that SCO would
acquire Novell's entire UNIX and UnixWare business, including the
copyrights. I do not recall and do not believe that there ever
was any instance in which anyone at SCO or Novell ever stated or
exhibited any contrary intent or understanding to me or anyone
else." Is that an accurate statement?

A. That's an accurate statement.

Q. You say in the back half of paragraph 9, quote, "It was my
intent on behalf of SCO to acquire, through the APA, Novell's
entire UNIX and UnixWare business, including the UNIX and UnixWare
source code and all associated copyrights, and I believed then,
open parens, as now, close parens, that Novell's intent was to
sell all of those assets and rights." Is that an accurate
statement?

A. Yes, that's an accurate statement. You wouldn't have had a
business without having the copyrights and trademarks.

Q. You say in paragraph 12, quote, "I do not recall anyone on
either side of the negotiations or transaction ever suggesting that
Novell would retain a copyright relating to UNIX or UnixWare. I am
not aware of any discussions, whether general or specific, during
the negotiations that contradict my understanding of the
transaction as set forth in this declaration." Is that an accurate
statement?

A. That is an accurate statement.

20

(Ex. 20 at 76-78.) Independent of his previous declaration,
moreover, Mr. Wilt repeatedly testifed to the parties' intent under
the APA was for Novell to transfer and Santa Cruz to acquire the
UNIX and UnixWare copyrights. (Id. at 28-29.)

21. Kimberlee Madsen was a member of the Santa Cruz legal
department at the time of the APA and Amendment No. 2 and assisted
in the negotiations. (Ex. 21 ¶¶ 3-4.) She explains:

It was always my understanding that the UNIX source
code and its copyrights were part of the assets Santa Cruz
purchased and were transferred to Santa Cruz at the closing in
December 1995.

I do not recall anyone in the negotiation teams ever saying, or
suggesting, that Novell would retain any UNIX copyrights. The
negotiation team for Santa Cruz never discussed the possibility, as
far as I am aware, that Novell sought to retain any UNIX
copyright.

Since the transaction closed in 1995 until Novell publicly
announced in 2003 that it still owned the UNIX copyrights, it was
my understanding and belief that neither party disputed that Santa
Cruz had acquired the UNIX copyrights in 1995.

* * * *

My understanding from the negotiations and discussions leading up
to the Amendment was that Amendment No. 2 was intended to
confirm, among other things, the parties' intent and agreement that
Santa Cruz had obtained ownership of the UNIX copyrights under the
APA and that Novell had received no rights with respect to UNIX
source code under the APA.

(Id. ¶¶ 9-11 (emphasis added).) In her recent
deposition in this case, Ms. Madsen confirmed that the parties'
intent and understanding at the time of negotiations was that the
APA transferred the copyrights to Santa Cruz. (Ex. 22 at 73-75,
81.)

21

B. The Parties' Prior Conduct.

22. Shortly after the closing of the APA in 1995, Santa Cruz
obtained physical possession of UNIX copyright registrations from
Novell; those registrations remain in SCO's possession to this day.
(See, e.g., Exs. 23-25.)

26. There is no evidence that Novell publicly asserted ownership
of UNIX copyrights between the date of the APA and May 28,
2003.

C. Novell's Recent Conduct.

27. On March 6, 2003, SCO filed its lawsuit against IBM
alleging, among other things, that IBM had violated its UNIX
Software and Sublicensing Agreements by disclosing UNIX-derivative
source code. (Ex. 35 at 32-50.)

22

28. On May 28, 2003, Novell publicly announced that it, and not
SCO, is the owner of the UNIX copyrights. In a letter to SCO CEO
Darl McBride that Novell published to the world, Novell CEO Jack
Messman stated:

Importantly, and contrary to SCO's assertions, SCO is
not the owner of the UNIX copyrights. Not only would a quick check
of U.S. Copyright Office records reveal this fact, but a review of
the asset transfer agreement between Novell and SCO confirms it. To
Novell's knowledge, the 1995 agreement governing SCO's purchase of
UNIX from Novell does not convey to SCO the associated copyrights.
We believe it unlikely that SCO can demonstrate that it has any
ownership interest whatsoever in those copyrights.

(Ex. 36 at NOV 000043054.)

29. The Novell executives who negotiated or were primarily
responsible for the APA in 1995, including Messrs. Frankenberg,
Mattingly, Thompson, Chatlos, and Levine, were no longer with
Novell in 2003. (Ex. 39 at 219-221.) Novell did not consult with
them before announcing its alleged ownership of the copyrights.
(Ex. 40 at 27, 60; Ex. 41 at 90-91.)

30. A few days after its May 28, 2003, announcement, Novell
received from SCO a copy of Amendment No. 2, which Novell had said
it did not have in its files and had not reviewed. (Ex. 37 ¶
13.) On June 6, 2003, Novell stated in a press release:

Amendment #2 to the 1995 SCO-Novell Asset Purchase
Agreement was sent to Novell last night by SCO. To Novell's
knowledge, this amendment is not present in Novell's files. The
amendment appears to support SCO's claim that ownership of certain
copyrights for UNIX did transfer to SCO in 1996.

(Ex. 38 at NOV 000043059.)

31. Novell has admitted that Amendment No. 2 was present in its
files prior to May 28, 2003. (Ex. 41 at 82-83.)

23

LEGAL STANDARD ON SUMMARY JUDGMENT

In this Motion, SCO asks the Court to resolve the issue of
copyright ownership that lies at the heart of the parties'
respective slander-of-title claims and that forms the basis in part
for SCO's contract and unfair-competition claims. Under Federal
Rule of Civil Procedure 56, a "party seeking to recover on a claim
. . . may . . . move . . . for a summary judgment in the party's
favor upon . . . any part thereof." The Advisory Committee Notes to
the 1946 amendment to Rule 56 state: "The partial summary
judgment is merely a pretrial adjudication that certain issues
shall be deemed established for the trial of the case. This type of
adjudication . . . serves the purpose of speeding up litigation by
eliminating before trial matters wherein there is no genuine issue
of fact." AccordMcDonnell v. Cardiothoracic &
Vascular Surgical Assocs., Inc., No. C2-03-0079, 2004 WL
1234138, at *1 (S.D. Ohio May 27, 2004) (Ex. A.).

"[I]t is now well established that a court may 'grant' partial
summary 'judgment' that establishes the existence or nonexistence
of certain facts, even though no actual judgment is entered on a
claim." 11 J. Moore, Moore's Federal Practice ¶
56.40[2] at 56-279 (3d ed. 1998) (footnote omitted). "A partial
summary judgment ruling may dispose of only a single issue relevant
to a claim . . . . In availing itself of the ability granted by
Rule 56 to issue orders which resolve significant questions, a
court can focus the litigation on the true matters in controversy."
Id. at 56-280 to 56-281.

I. THE APA PLAINLY TRANSFERRED THE UNIX AND UNIXWARE
COPYRIGHTS TO SANTA CRUZ.

A. The Plain Language Provides for the Transfer.

The APA provided for the transfer of the UNIX and UnixWare
copyrights where it indisputably provided for the transfer of:

All of Novell's "right, title, and interest in and to" the UNIX
and UnixWare source code and products (¶¶ 3-4), and

"All rights and ownership of UNIX and UnixWare," including
"without limitation" the source code, source code products, binary
products, and products in development (¶ 4).

Under the case law, each of these provisions provides for the
transfer of the copyrights.

"In a non-consumer setting such as this, a transfer of all
right, title and interest to computer programs and software can
only mean the transfer of the copyrights as well as the actual
computer program or disks." Shugrue v. Cont'l Airlines,
Inc., 977 F. Supp. 280, 285-86 (S.D.N.Y. 1997) (transfer of
"all right, title, and interest" unambiguously transferred
copyrights); see alsoRelational Design & Tech., Inc.
v. Brock, No. 91-2452-EEO, 1993 WL 191323, at *6 (D. Kan. May
25, 1993) (Ex. C) (concluding that "all rights in the program
(including the copyright) were transferred" to purchaser because
contract provided for transfer of "all rights" in the program);
Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d
410, 413 (7th Cir. 1992) (copyrights transferred by wording leaving
"little doubt" that seller sold "all the assets" of

Under Section 1.1(a) of the APA, Novell and Santa Cruz agreed
that on the Closing Date Novell would "sell, convey, transfer,
assign and deliver" and Santa Cruz "purchase and acquire" at
minimum "all right, title and interest in and to the assets and
properties" identified in Schedule 1.1(a) of the APA. (¶ 3.)
In turn, Schedule 1.1(a) identifies seven categories of "as assets
and properties" transferred to Santa Cruz, including:

"All rights and ownership of UNIX and UnixWare,
including but not limited to all versions of UNIX and UnixWare
and all copies of UNIX and UnixWare (including revisions and
updates in process) and all appropriate technical, design,
development, installation, operations and maintenance information
concerning UNIX and UnixWare, including source code," source
code products, binary products releases, and products under
development.

(¶ 4.) The APA thus plainly provides for the transfer —
without limitation — of all right, title, and interest in the
UNIX and UnixWare source code and products, and all rights and
ownership of UNIX and UnixWare, including a non-exhaustive list of
express assets and properties. In providing for the transfer of
all rights, Section 1(a) and Item I plainly include the
copyrights.

There can be no question, moreover, that the transfer of the
copyrights in fact took place. Section 1.1(a) of the APA defines
the assets and properties to be transferred on the Closing Date as
the "Assets." (¶ 3.) On the Closing Date, Novell and Santa
Cruz executed the Bill of Sale, which provides:

In accordance with [Section] 1.1(a) of the Agreement,
Seller, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, does hereby
transfer, convey, sell, assign and deliver to Buyer, without
recourse, representation or warranty except as otherwise expressly
provided in the Agreement, all of the Assets.

26

(¶ 5.) The Bill of Sale thus expressly effectuated the
transfer, conveyance, sale, assignment, and delivery to Santa Cruz
of "all of the Assets," as provided by Section 1.1(a) of the APA.
As the Assets plainly included "all rights and ownership" of UNIX
and UnixWare, including the copyrights, the Bill of Sale in fact
transferred the copyrights to Santa Cruz on the Closing Date.

The TLA confirms that Novell transferred the copyrights to Santa
Cruz on the Closing Date. "It is a general rule that several papers
relating to the same subject-matter and executed as parts of
substantially one transaction, are to be construed together as one
contract." Harm v. Frasher, 181 Cal. App. 2d 405, 412-13
(Ct. App. 1960); Heston v. Farmers Ins. Group, 160 Cal. App.
3d 402, 417 (Ct. App. 1984) ("The two documents are interrelated
and must be read together for purposes of interpretation.").

Section 1.6 of the APA expressly provided for a license back to
Novell of the same UNIX and UnixWare technology indisputably
transferred to Santa Cruz under the APA (the "Licensed
Technology"). (¶ 6.) On the Closing Date, Santa Cruz granted
that license to Novell in the TLA, subject to strict restrictions,
specifying that "Ownership of the Licensed Technology shall reside
in SCO." (Id.) Section 1.6 and the TLA would be senseless
had Novell retained ownership of the copyrights. Novell would not
have needed a license to the Licensed Technology, let alone agreed
to a license subject to strict restrictions, and ownership of the
Licensed Technology would have resided in Novell, not Santa Cruz.
Simply put, Novell would have licensed the technology to Santa
Cruz, not the other away around. In reading the APA in harmony with
the plain language of the TLA, the Court may properly conclude, on
this basis alone, that the APA transferred the copyrights to Santa
Cruz.

27

Other touchstone provisions of the APA confirm the transfer of
the copyrights. The first provision of the APA, Recital A as
amended, explains:

Seller is engaged in the business of developing a line
of software products currently known as UNIX and UnixWare, the sale
of binary and source code licenses to various versions of UNIX and
UnixWare, the support of such products and the sale of other
products ("Auxiliary Products") which are directly related to Unix
and UnixWare (collectively, the "Business").

(¶ 2.) Recital B and Section 1.3(a)(i) then express the intent
to transfer the entire Business to Santa Cruz through the APA.
Recital B provides:

The Board of Directors of each Seller and Buyer believe
it is in the best interests of each company and their respective
stockholders that Buyer acquire certain of the assets of, and
assume certain of the liabilities of Seller comprising the
Business (the "Acquisition").

(Ex. 1, Recital B (emphasis added).) Similarly, Section 1.3(a)(i)
expressly states that "It is the intent of parties hereto that
all of the Business and all of Seller's backlog, if any,
relating to the Business be transferred to Buyer." (¶ 1.) Such
provisions do not even suggest any limitation on the transfer of
the Business and its assets. On the contrary, they expressly set
forth Novell's intent to transfer the entire Business. There is no
exclusion of copyrights.

Throughout the course of this litigation, Novell has not
acknowledged, much less explained, the provisions setting forth the
transfer of, as well as the intent to transfer, all of the Assets.
Instead, Novell has relied on Item V.A of the Excluded Assets
Schedule in the original APA, but that Item literally no longer
exists. Amendment No. 2 to the APA revised Item V.A "to read" as
follows:

All copyrights and trademarks, except for the
copyrights and trademarks owned by Novell as of the date of the
Agreement

28

required for SCO to exercise its rights with respect
to the acquisition of UNIX and UnixWare technologies. However,
in no event shall Novell be liable to SCO for any claim brought by
any third party pertaining to said copyrights and
trademarks.

(¶ 8.) To perpetuate the alleged exclusion of the UNIX and
UnixWare copyrights in Item V.A, Novell has read the original APA
and Amendment No. 2 in isolation. In fact, Section A replaces the
original Item V.A, clarifying that the Excluded Assets do not
include those copyrights, which were transferred with "all the
Assets" under the APA and Bill of Sale.

Amendment No. 2 clarified that the copyrights at issue
were not Excluded Assets. Section A states that the Excluded Assets
do not include the copyrights "required for SCO to exercise its
rights with respect to the acquisition of UNIX and UnixWare
technologies." (Id.) Plainly the UNIX and UnixWare
copyrights are so required. SCO's rights with respect to its
acquisition of UNIX and UnixWare technologies include:

The rights to develop, license, and support UNIX and UnixWare
products to evolve the Business transferred under the APA. (¶
1-2.) Absent a license, only the owner of the UNIX and UnixWare
copyrights has such rights. Those copyrights were plainly required
for Santa Cruz to exercise its rights to run the Business.

All rights and ownership in UNIX and UnixWare source code and
products. (¶¶ 3-4.) Only the owner of the UNIX and
UnixWare copyrights has the authority to exercise such unlimited
rights. Those copyrights thus were clearly required for Santa Cruz
to exercise its other, unlimited rights in the source code and
products.

Claims arising after the Closing Date against any parties
relating to any right, property, or asset included in the Business.
(¶ 4.) Without the copyrights, Santa Cruz could not have

29

pursued such claims for the unauthorized use and distribution of
its UNIX and UnixWare code and products.

All rights pertaining to UNIX and UnixWare under any assignable
contract or license. (Id.) Because without the copyrights
Santa Cruz would have been powerless to enforce covenants and
conditions in such contracts or licenses, the copyrights were
required for Santa Cruz to exercise those rights.

The copyrights at issue thus were required for Santa Cruz to
exercise these and other rights it obtained with its acquisition of
the UNIX and UnixWare technologies. Novell cannot seriously argue
otherwise.

B. The APA Bill of Sale Exceeds the Requirements of the
Copyright Act.

Under the case law, the transfer language in the Bill of Sale
far exceeds the requirements of Section 204 of the Copyright
Act.

"As with all matters of contract law, the essence of the inquiry
here is to effectuate the intent of the parties. Accordingly, even
though a written instrument may lack the terms 'transfer' and
'copyright,' it still may suffice to evidence their mutual intent
to transfer the copyright interest." Nimmer on Copyrights
§ 10.03[2] (collecting cases); Kenbrooke Fabrics, Inc. v.
Soho Fashions, Inc., 690 F. Supp. 298, 301 (S.D.N.Y. 1988)
(invoice and short letter transferring ownership of products
without mention of copyrights suffice). No particular language or
"magic words" are required. Radio Television Espanola S.A. v.
New World Entm't, Ltd., 183 F.3d 922, 927 (9th Cir. 1999). The
word "copyright" is not required. See, e.g., ITOFCA, Inc.
v. Megatrans Logistics, Inc., 322 F.3d 928, 931 (7th Cir. 2003)
(transfer of "all assets" to a business suffices); Dick Corp. v.
SNC-Lavalin Constructors, Inc., No. 04 C 1043,

In this case, the APA provided for the transfer by Novell and
acquisition by Santa Cruz of the Assets, including all rights and
ownership of UNIX and UnixWare. (¶¶ 3-4.) On the Closing
Date, the parties executed the Bill of Sale effectuating the
transfer of all the Assets:

In accordance with [Section] 1.1(a) of the Agreement,
Seller, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, does hereby
transfer, convey, sell, assign and deliver to Buyer, without
recourse, representation or warranty except as otherwise expressly
provided in the Agreement, all of the Assets.

(¶ 5.) Under the applicable authority, the language
identifying the Assets by reference to Section 1.1(a) of the APA
easily meets the statutory requirements and the language providing
for the transfer, conveyance, sale, assignment and delivery of the
Assets far exceeds the requirements.

31

More to the point, the Bill of Sale manifests the intent to
transfer all rights and ownership of UNIX and UnixWare,
including the copyrights.

The APA unambiguously provided for the transfer to Santa Cruz of
all right, title, and interest and all rights and ownership of UNIX
and UnixWare. The Bill of Sale unambiguously effectuated that
transfer and complied with the Copyright Act. Based on the plain
language of the APA and its Bill of Sale, SCO is entitled to
partial summary judgment on the transfer of the UNIX and UnixWare
copyrights to Santa Cruz under the APA.

II. OVERWHELMING EXTRINSIC EVIDENCE CONFIRMS THE TRANSFER OF
THE UNIX AND UNIXWARE COPYRIGHTS TO SANTA CRUZ UNDER THE
APA.

The overwhelming extrinsic evidence, including the testimony of
all the central witnesses and the parties' conduct during the years
that followed the APA, confirms SCO's position.

A. Testimonial Evidence.

On September 20, 1995, pursuant to the APA, Novell and Santa
Cruz issued a joint press release announcing the transaction. In
that press release, Novell admitted that "SCO will acquire Novell's
UnixWare business and UNIX intellectual property." (¶ 9.)

The following witnesses who were with Novell at the time of the
APA have testified, in no uncertain terms, that Novell intended to
transfer the copyrights under the APA:

Robert Frankenberg, CEO of Novell at the time of the APA.
(¶¶ 10-11.)

Ty Mattingly, Novell's Vice President for Strategic Relations,
member of the Novell negotiating team, and Mr. Frankenberg's
liaison to the negotiations. (¶ 12.)

Duff Thompson, the Novell senior executive assigned by Mr.
Frankenberg to oversee the transaction and Novell's representative
on the Santa Cruz Board after the sale. (¶ 13.)

32

Ed Chatlos, the chief negotiator for Novell. (¶ 14.)

Burt Levine, a Novell attorney who reviewed and revised drafts
of the APA, was familiar with the negotiations, and worked for
Santa Cruz after the sale. (¶ 15.)

Bill Broderick, a contract manager in the UNIX licensing group
at Novell and Santa Cruz, and a member of the Novell transition
team. (¶¶ 16-17.) The following witnesses who were with
Santa Cruz at the time of the APA have testified that the parties
intended for the APA to transfer the copyrights to Santa Cruz:

Alok Mohan, CEO of Santa Cruz at the time of the APA. (¶
18.)

Doug Michels, founder and Senior Vice President of Santa Cruz
at the time of the APA. (¶ 19.)

Jim Wilt, the chief negotiator for Santa Cruz. (¶
20.)

Kimberlee Madsen, a member of the Santa Cruz legal department
who assisted Mr. Wilt in the negotiations. (¶ 21.)

Thus, to date, no fewer than nine witnesses have given sworn
deposition testimony in support of SCO's position.3 (¶¶ 10-21.)

B. The Parties' Prior Conduct.

The parties' conduct during the years that followed the APA
confirms the transfer of the copyrights under the APA and belies
Novell's current litigation position. Such conduct includes:

33

With the closing, Santa Cruz obtained physical possession of
UNIX copyright registrations, which remain in SCO's possession to
this day. (¶ 22.)

Since 1995, without objection from Novell, Santa Cruz and SCO
entered into hundreds of license agreements for UNIX products that
not only contain express representations and warranties of SCO's
rights and ownership in the intellectual property required to
provide the licensed product, but that also indemnify licensees
against any third-party claims for copyright infringement. (¶
24.)

Before May 28, 2003, Novell did not contest Santa Cruz's or
SCO's public statements and conduct asserting ownership of the UNIX
copyrights. (¶ 25.)

There is no evidence that Novell publicly asserted ownership of
UNIX copyrights between the Closing Date of the APA and May 28,
2003.

Such conduct establishes that Santa Cruz understood it had obtained
the copyrights in 1995 and that Novell was aware of and agreed with
that understanding.

34

C. Novell's Recent Conduct.

On May 28, 2003, for the first time since the execution of the
APA, Novell asserted ownership of the copyrights at issue. (¶
28.) The evidence reveals that Novell's ownership claims were
minted anew to thwart and harm SCO. (Ex. 29 at 11-13; ¶¶
27-31.) Novell made those claims without consulting the Novell
executives who had actually negotiated or been responsible for the
APA in 1995. (¶ 29.) On June 6, 2003, after SCO had found and
sent to Novell a copy of Amendment No. 2, Novell candidly
admitted:

Amendment #2 to the 1995 SCO-Novell Asset Purchase
Agreement was sent to Novell last night by SCO. To Novell's
knowledge, this amendment is not present in Novell's files. The
amendment appears to support SCO's claim that ownership of certain
copyrights for UNIX did transfer to SCO in 1996.

(¶ 30.) Although in early 2003 Novell denied having Amendment
No. 2, Novell has now admitted that the amendment was found in its
files prior to May 28, 2003. (¶¶ 30-31.) Such evidence
leaves little doubt about Novell's motivations for making its
contested ownership claims.

35

CONCLUSION

SCO respectfully submits, for the foregoing reasons, that the
Court should grant SCO's Motion for Partial Summary Judgment on Its
First, Second, and Fifth Causes of Action and for Summary Judgment
on Novell's First Counterclaim.

Plaintiff/Counterclaim Defendant, The SCO Group, Inc., hereby
certifies that a true and correct copy of the foregoing SCO's
Memorandum in Support of Its Motion for Partial Summary Judgment on
Its First, Second, and Fifth Causes of Action and for Summary
Judgment on Novell's First Counterclaim was served on Defendant,
Novell, Inc., on this 9th day of April, 2007, via CM/ECF to the
following:

Even a subsequent confirmatory writing suffices to effectuate a
valid transfer. Arthur Rutenberg Homes, Inc. v. Drew Homes,
29 F.3d 1529, 1532 (11th Cir. 1994) ("[T]he requirements of 17
U.S.C. § 204(a) can be satisfied by an oral assignment later
ratified or confirmed by a written memorandum of the transfer.");
Nimmer, supra, § 10.03[3] ("[I]f a prior oral grant is
subsequently confirmed in writing, it validates the grant ab initio
as of the time of the oral grant.").

In addition, courts avoid the nonsensical and inefficient situation
created by divided ownership of tangible and non-tangible property.
SeeSchiller, 969 F.2d at 413 (court should not
interpret agreement to divide ownership of property from ownership
of copyrights for that property; such divided ownership creates
"diseconomies" because a "stand off" would ensue between the
property holder, whose ability to exploit the property he owns is
significantly curtailed, and the copyright holder, who of course
cannot exploit the copyright without the tangible property).

Such witnesses, including Messrs. Frankenberg, Mattingly,
Chatlos, and Wilt, testified that the original Item V of the
Excluded Assets Schedule was intended to exclude copyrights in
Netware, not in UNIX or UnixWare. (Ex. 7 at 21-22; Ex. 9 at 52; Ex.
13 at 40-41; Ex. 16 at 104-07; Ex. 20 at 29-30, 35.) Moreover,
witnesses with personal knowledge of the negotiation and intent of
Amendment No. 2 have testified that that amendment was intended to
clarify or confirm that the copyrights were transferred under the
APA. (Ex. 11 at 24; Ex. 18 at 100-03; Ex. 20 at 35; Ex. 21 ¶
11.)